Central banks
Turkey's central bank cuts its policy rate to 36% from 37%
Türkiye's central bank lowered its one-week repo rate by 100 basis points to 36%, citing a slowing underlying trend of inflation and weak domestic demand.
Key points
- The one-week repo rate fell to 36% from 37%, the overnight lending rate to 39% and the borrowing rate to 34.5%.
- The bank said elevated energy prices remain an upside risk to inflation.
- Policy will be tightened if the inflation outlook deteriorates significantly and persistently.
The Central Bank of the Republic of Türkiye cut its policy rate by 100 basis points on October 22, lowering the one-week repo auction rate to 36 percent from 37 percent. The Monetary Policy Committee also reduced the overnight lending rate to 39 percent from 40 percent and the overnight borrowing rate to 34.5 percent from 35.5 percent.
The committee had kept the policy rate at 37 percent at its previous meeting.
In its statement, the committee said recent inflation figures and leading indicators confirm a slowdown in the underlying trend of inflation. It added that economic activity data and the limited pass-through of supply shocks show that domestic demand remains weak.
The committee cautioned that elevated energy prices due to ongoing geopolitical tensions continue to pose an upside risk to the inflation outlook, and said it is monitoring their effects through cost, activity and expectations channels.
The bank said its tight monetary policy stance will be maintained until price stability is achieved, with the size and timing of steps decided on a meeting-by-meeting basis. If the inflation outlook deteriorates significantly and persistently, the stance will be tightened. The central bank aims to reach its 5 percent inflation target in the medium term. Annual consumer inflation stood at 29.73 percent in September, Hürriyet Daily News reported.
A summary of the committee's meeting is due within five working days.
